RV industry’s optimism clouded by short-seller interest and lingering post-pandemic woes. So what lies ahead?

Representatives of RV manufacturers and campground owners keep radiating good cheer about the upcoming season, paying extravagant notice to every uptick in sales and reservations. And indeed there is cause for cautious optimism, with new RV shipments having arrested last year’s free-fall and notching slight gains, while KOA has reported that 64% of campers already have made reservations “for some sort of trip” in 2024. So maybe the first day of spring truly was a sunny one.

Yet it’s also clear that industry participants remain leery of what lies just over the horizon, and there’s good reason for that, too. Short-seller interest in Thor Industries and Winnebago Industries, the two 800-pound gorillas in the RV manufacturing segment, has been piqued, not least because Thor earlier this month slashed its 2024 outlook based on soft demand and high interest rates. Winnebago, more ominously, recently announced an 18.8% drop in revenues for its second quarter, ending Feb. 24—a decline, it should be noted, from an already weak second quarter last year.

Then there’s the mid-March decision by Marcus Lemonis, chief executive officer of Camping World Holdings, to unload nearly a fifth of his company’s stock holdings on a Friday afternoon, when public notice might be minimized. His $2.56 million payday came several weeks after Camping World announced a 10.6% decline in revenues for 2023, with new vehicles sales for the year down 16.6%. Investor interest in this company also has grown increasingly bearish.

Post-pandemic hangover in the RV industry

As the Camping World example illustrates, the industry’s ongoing problem is a post-pandemic hangover that just won’t quit. The explosion in RV sales that started in 2020, while a short-term windfall for manufacturers and dealers, has proven to be too much of a good thing. Too many units were cranked out in too short a time, resulting in significant production quality issues, while unceasing demand drove prices way too high. When the wind dropped out of the industry’s sails, dealers were left with too much outdated inventory that is still clogging their lots even as newer—and lower-priced—models are being delivered.

Lemonis tried to put a bright face on his company’s year-end report by noting that used vehicle sales were up even as new vehicle sales dropped. But as overall revenue figures suggest, that wasn’t nearly enough. While used vehicle revenue increased $102 million, new vehicle revenue dropped $651.8 million. And the average selling price of both new and used RVs declined—4.3% and 4.8%, respectively—further underscoring how greatly inflated the industry’s entire pricing structure had become. Indeed, the monthly Black Book reports on wholesale auctions have recorded six consecutive months of price declines for towables, while motorhome value trends have trended downwards since October of 2021, albeit in seesaw fashion.

General economic outlook guarded

Meanwhile, general economic news provides little to no reason to think demand will pick up significantly. With interest rates still high because of ongoing inflation anxieties, Americans are either tapped out or turning to deficit spending to sustain their lifestyles. Credit card debt is up and is taking longer to get paid down, with unpaid balances surpassing 2019 for the first time and delinquency rates continuing a steady rise since 2021.

With record numbers of Americans unable to afford their rent, and many costs related to car ownership outpacing the consumer price index—AAA calculates that the total annual cost of owning a new car was $12,182 last year, up from $10,728 in 2022—more people are using their 401(k) accounts as piggybanks. As reported by The Wall Street Journal, 3.6% of Vanguard’s 401(k) plan holders took early withdrawals last year for financial emergencies, nearly double the pre-pandemic average of about 2%.

All of which explains why the nearly 200 respondents to a recent Wells Fargo/RVBusiness survey of RV dealers had, at best, a tepid outlook for the coming year. More than a third (39%) expect a flat-to-down year, while an almost equal percentage (38%) expect growth of 0-10%. Asked to describe the general state of the RV market, only 14% agreed “it’s solid, despite increasing interest rates, soft demand and other headwinds.” At the other extreme, 19% said it’s the “worst it’s been since the 2008-09 recession,” while 39% admitted to being “nervous about inflation, potential recession and other challenges.”

RV industry executives under false impressions

Some of the dealers’ comments, meanwhile, echoed what many RV campers have been saying for several years. When it comes to repairs, for example, “parts and service has only gotten worse and the factories do not care at all,” while “manufacturers underpaying for warranty work is a major problem.” Or as another respondent observed, “It appears most RV industry executives, both suppliers and builders, are under the impression their quality is good. In most cases this is laughable.”

And on a more poignant note that should touch a nerve in all corners of the RV and campground ecosystem, there’s this: “I think the industry has lost touch [with] what camping was all about. Where has affordable family fun gone?”

Andy Zipser is the author of Renting Dirt, the story of his family’s experiences owning and operating a Virginia RV park, and of Turning Dirt, a step-by-step guide for finding, buying and operating an RV park and campground. Both books are available through bookstores or at Amazon.com.

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